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ndonesia is seeking compensation from the United States as the country has failed to revise its discriminative tobacco rule to comply with the World Trade Organization (WTO) ruling by the deadline on Wednesday.

Under the WTO'€™s regulations, compensation normally comes in the form of a tariff cut by the losing country equal to the value lost.

Trade Ministry'€™ director general for international trade cooperation Iman Pambagyo said on Thursday that Indonesia would also soon lodge a complaint over the US'€™ failure to change its rule to the Dispute Settlement Body (DSB).

'€œWe will seek compensation first, and if the US is still unwilling to fulfill our demand, we will advance by imposing retaliation,'€ he said, adding that Indonesia would strongly defend its rights to obtain a fair solution over the case.

Retaliation, a form of trade sanctions imposed by the complaining side on its trade partner, usually comes following a disagreement on compensation between disputing parties.

The DSB is slated to authorize this action within 30 days of the expiry of the '€œreasonable period'€ unless there is another agreement against the request. The trade organization'€™s appellate body ruled in favor of Indonesia in April last year, declaring that the US'€™ Tobacco Control Act of 2009 is discriminatory as it bans sales of clove cigarettes while still allowing trade of similar products, particularly menthol cigarettes.

Clove cigarettes has competed tightly with menthol cigarettes, which accounted for 25 percent of overall cigarettes sold in the US and are produced massively by US cigarette makers, including Lorillard Inc, the Philip Morris USA unit of Altria Group, RJ Reynolds Tobacco Co of Reynolds American Inc, and Liggett Vector Brands LLC.

Following the ruling, the US was required to change its regulation within the reasonable period of time '€” which expired on July 24. A revision to the act could reopen access to clove cigarettes of which Indonesia is the world'€™s biggest producer.

Indonesia'€™s commodity used to control 99 percent of total clove cigarettes sold in the US with annual shipment amounted to around US$200 million, according to an estimate.

Iman further said, Indonesia was deeply disappointed with the US'€™s claim that it had taken appropriate measures in line with the recommendations of the DSB through campaigns on public health challenges posed by menthol cigarettes.

One of the campaigns takes the form of a scientific review issued by the US Food and Drug Administration, revealing that menthol cigarettes are likely to be more addictive than regular cigarettes, thereby posing a public health risk above that seen with non-menthol cigarettes.

'€œIt is quite surprising that the US, which always demands other countries to obey disciplines and agreements of the WTO, does not correct its own policy that clearly violates the WTO rules,'€ Iman said.

Troy Pederson, press attaché at the US Embassy in Jakarta, could not be reached for comment.